Gerald B. Treacy, Jr.

Surviving and Thriving in the “Tax Patent” Era

A patent is generally valid for 20 years from the date of the application. And the law warns: “[W]hoever without authority makes, uses, offers to sell, or sells any patented invention . . . during the term of the patent therefor, infringes the patent.” Similarly, “[w]hoever actively induces infringement of a patent” is liable as an infringer. The patentee has “remedy by civil action” and injunctive relief for infringement of the patent. The patent is “presumed valid” and in the case of multiple claims, each claim is “presumed valid independently of the validity of other claims.” The patentee’s recoverable damages in a successful infringement suit are to be “adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court.” The court has the discretion to “increase the damages up to three times the amount found or assessed.” The patentee is entitled to royalties for the period prior to the issuance of the patent if the infringer had “actual notice” of the published patent application, as to claims that are “substantially identical” in the published application and the issued patent. In “exceptional cases,” the court may award “reasonable attorney fees to the prevailing party.” A six-year statute of limitation applies to infringement actions.

If these key elements of the patent provisions are fairly easy to comprehend, the same is not always true for the core of a patent or application: the claims asserted for the invention, and the strange, often opaque language in which these claims are expressed. To someone unfamiliar with this arcane area of legal drafting, the claims language can be reminiscent of the Dark Ages riddle-poetry you find in English literature anthologies, sandwiched between Beowulf and The Canterbury Tales excerpts. Here’s an example of some good claims language, excerpted at random from the USPTO website: “A method according to claim 1 wherein said hinge portions are deformed to position each of said fins such that an imaginary line tangent to an innermost surface of said hinge portion and to an outermost edge at a distal end of said fin is at an angle in the range of about 20.degree. to about 90.degree. relative to a radial of said rotational axis.”

Of course, patent attorneys probably would find the Treasury Regulations heavy reading. Perhaps the claims language for a tax patent may be less daunting for estate planners, who at least are familiar with the invention’s basic elements.

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